Wendy's Q1 Earnings Meet Estimates, Revenues Miss, Both Down Y/Y

Core Viewpoint - Wendy's Company reported first-quarter fiscal 2025 results with earnings meeting expectations but revenues falling short, reflecting a decline in global systemwide sales primarily due to lower same-restaurant sales in the U.S. [1][3] Financial Performance - Adjusted earnings per share (EPS) were 20 cents, matching the Zacks Consensus Estimate, down from 23 cents in the prior-year quarter [3] - Total revenues were $523.5 million, missing the consensus mark by 0.1% and declining 2.1% year over year; adjusted revenues (excluding advertising funds) fell 1.6% to $423.1 million [3] - Net income decreased to $39.2 million, down 6.7% from $42 million in the year-ago quarter; adjusted EBITDA totaled $124.5 million, down 2.6% from $127.8 million [8] Sales and Restaurant Performance - Global system-wide sales declined 1.1% year over year, with U.S. sales down 2.6% while international sales increased by 8.9% [5] - Same-restaurant sales in the U.S. fell 2.8% year over year, compared to a 0.6% increase in the prior-year quarter; international same-restaurant sales rose 2.3% [4] Operational Highlights - U.S. company-operated restaurant margin was 14.8%, down 50 basis points year over year due to commodity inflation and labor rate inflation, partially offset by increased average check and labor efficiencies [6] - General and administrative expenses rose 6.9% year over year to $68.2 million, driven by increased employee compensation and benefits [7] Balance Sheet and Cash Flow - Cash and cash equivalents as of March 31, 2025, totaled $335.3 million, down from $450.5 million on December 29, 2024; long-term debt remained at $2.66 billion [9] - Free cash flow is now expected to be between $250 million and $270 million, revised down from a prior estimate of $275 million to $285 million [12] Dividend and Future Outlook - A quarterly dividend of 14 cents per share was declared, payable on June 16, 2025 [10] - The company revised its outlook for global system-wide sales growth to between -2% to flat, and adjusted EBITDA is now predicted to be between $530 million and $545 million [11]